NEW YORK—Credit unions may want to caution their members over credit card surcharges that may be becoming a mainstream practice during the pandemic.
Retailers are allowed to charge customers to cover the expenses of merchant fees when customers use credit cards. Merchants can pass along a charge equal to what they pay to accept the card which can be up to 4%.
“However, consumers should be wary of any credit card surcharge in excess of 1% to 1.5%, as this is usually the rate merchants pay to accept a card,” reported NWestIowa.com, noting the practice is on the rise.
“Merchants may set a $10 minimum for credit card purchases under the Dodd-Frank Wall Street Reform and Consumer Protection Act…Businesses are charging more fees, in some cases calling them “COVID surcharges. These could include retailers charging consumers more to use credit cards. Medical offices, salons, long-term care facilities, restaurants and other companies are charging fees to offset costs of personal protective equipment, increased cleaning or other costs related to the pandemic,” NWestIowa.com said.